Subdivision 1. Issuance. The state commissioner of
health is hereby authorized to issue licenses to operate
hospitals, sanitariums, outpatient surgical centers, or other
institutions for the hospitalization or care of human beings,
which are found to comply with the provisions of sections 144.50
to 144.56 and any reasonable rules promulgated by the
commissioner. The commissioner shall not require an outpatient
surgical center licensed as part of a hospital to obtain a
separate outpatient surgical center license. All decisions of
the commissioner thereunder may be reviewed in the district
court in the county in which the institution is located or
contemplated.

Subd. 1b. Standards for nursing care. As a condition
of licensure, outpatient surgical centers must provide nursing
care consistent with nationally accepted nursing clinical
standards for perioperative nursing, including, but not limited
to Association of Operating Room Nurses and American Nurses
Association standards, which are generally accepted in the
professional nursing community.

Subd. 2. Definitions. For the purposes of this
section, the following terms have the meanings given:

(a) "Outpatient surgical center" or "center" means a
freestanding facility organized for the specific purpose of
providing elective outpatient surgery for preexamined,
prediagnosed, low-risk patients. Admissions are limited to
procedures that utilize general anesthesia or conscious sedation
and that do not require overnight inpatient care. An outpatient
surgical center is not organized to provide regular emergency
medical services and does not include a physician's or dentist's
office or clinic for the practice of medicine, the practice of
dentistry, or the delivery of primary care.

Subd. 3. Standards for licensure. (a)
Notwithstanding the provisions of section 144.56, for the
purpose of hospital licensure, the commissioner of health shall
use as minimum standards the hospital certification regulations
promulgated pursuant to Title XVIII of the Social Security Act,
United States Code, title 42, section 1395, et seq. The
commissioner may use as minimum standards changes in the federal
hospital certification regulations promulgated after May 7,
1981, if the commissioner finds that such changes are reasonably
necessary to protect public health and safety. The commissioner
shall also promulgate in rules additional minimum standards for
new construction.

(b) Each hospital and outpatient surgical center shall
establish policies and procedures to prevent the transmission of
human immunodeficiency virus and hepatitis B virus to patients
and within the health care setting. The policies and procedures
shall be developed in conformance with the most recent
recommendations issued by the United States Department of Health
and Human Services, Public Health Service, Centers for Disease
Control. The commissioner of health shall evaluate a hospital's
compliance with the policies and procedures according to
subdivision 4.

Subd. 4. Routine inspections; presumption. Any
hospital surveyed and accredited under the standards of the
hospital accreditation program of the joint commission that
submits to the commissioner within a reasonable time copies of
(a) its currently valid accreditation certificate and
accreditation letter, together with accompanying recommendations
and comments and (b) any further recommendations, progress
reports and correspondence directly related to the accreditation
is presumed to comply with application requirements of
subdivision 1 and the standards requirements of subdivision 3
and no further routine inspections or accreditation information
shall be required by the commissioner to determine compliance.
Notwithstanding the provisions of sections 144.54 and 144.653,
subdivisions 2 and 4, hospitals shall be inspected only as
provided in this section. The provisions of section 144.653
relating to the assessment and collection of fines shall not
apply to any hospital. The commissioner of health shall
annually conduct, with notice, validation inspections of a
selected sample of the number of hospitals accredited by the
joint commission, not to exceed ten percent of accredited
hospitals, for the purpose of determining compliance with the
provisions of subdivision 3. If a validation survey discloses a
failure to comply with subdivision 3, the provisions of section
144.653 relating to correction orders, reinspections, and
notices of noncompliance shall apply. The commissioner shall
also conduct any inspection necessary to determine whether
hospital construction, addition, or remodeling projects comply
with standards for construction promulgated in rules pursuant to
subdivision 3. Pursuant to section 144.653, the commissioner
shall inspect any hospital that does not have a currently valid
hospital accreditation certificate from the joint commission.
Nothing in this subdivision shall be construed to limit the
investigative powers of the Office of Health Facility Complaints
as established in sections 144A.51 to 144A.54.

Subd. 5. Coordination of inspections. Prior to
conducting routine inspections of hospitals and outpatient
surgical centers, a state agency shall notify the commissioner
of its intention to inspect. The commissioner shall then
determine whether the inspection is necessary in light of any
previous inspections conducted by the commissioner, any other
state agency, or the joint commission. The commissioner shall
notify the agency of the determination and may authorize the
agency to conduct the inspection. No state agency may routinely
inspect any hospital without the authorization of the
commissioner. The commissioner shall coordinate, insofar as is
possible, routine inspections conducted by state agencies, so as
to minimize the number of inspections to which hospitals are
subject.

Subd. 6. Suspension, revocation, and refusal to renew.
(a) The commissioner may refuse to grant or renew, or may
suspend or revoke, a license on any of the following grounds:

(1) violation of any of the provisions of sections 144.50
to 144.56 or the rules or standards issued pursuant thereto, or
Minnesota Rules, chapters 4650 and 4675;

(2) permitting, aiding, or abetting the commission of any
illegal act in the institution;

(3) conduct or practices detrimental to the welfare of the
patient; or

(4) obtaining or attempting to obtain a license by fraud or
misrepresentation; or

(5) with respect to hospitals and outpatient surgical
centers, if the commissioner determines that there is a pattern
of conduct that one or more physicians who have a "financial or
economic interest," as defined in section 144.6521, subdivision
3, in the hospital or outpatient surgical center, have not
provided the notice and disclosure of the financial or economic
interest required by section 144.6521.

(b) The commissioner shall not renew a license for a
boarding care bed in a resident room with more than four beds.

Subd. 7. Hearing. Prior to any suspension,
revocation or refusal to renew a license, the licensee shall be
entitled to notice and a hearing as provided by sections 14.57
to 14.69. At each hearing, the commissioner shall have the
burden of establishing that a violation described in subdivision
6 has occurred.

If a license is revoked, suspended, or not renewed, a new
application for license may be considered by the commissioner if
the conditions upon which revocation, suspension, or refusal to
renew was based have been corrected and evidence of this fact
has been satisfactorily furnished. A new license may then be
granted after proper inspection has been made and all provisions
of sections 144.50 to 144.56 and any rules promulgated
thereunder, or Minnesota Rules, chapters 4650 and 4675, have
been complied with and recommendation has been made by the
inspector as an agent of the commissioner.

Subd. 8. Rules. The commissioner may promulgate
rules necessary to implement the provisions of this section,
except that the standards described in subdivision 3 shall
constitute the sole minimum quality standards for licensure of
hospitals.

Subd. 9. Expiration of presently valid licenses. All
licenses presently in effect shall remain valid following May 7,
1981 and shall expire on the dates specified on the licenses
unless suspended or revoked.

Subd. 10. Evaluation report. On November 15, 1983,
the commissioner shall provide the legislature and the governor
with a written report evaluating the utilization of the
accreditation program, paying particular attention to its effect
upon the public health and safety.

Subd. 11. State hospitals not affected. Subdivisions
3, 4 and 5 do not apply to state hospitals and other facilities
operated under the direction of the commissioner of human
services.